Alibaba and Haier in online tie-up
E-commerce giant buys stake in Haier Electronics' logistics arm, in move seen as bid to exploit online shopping boom
Shares in Haier Electronics rose as much as 15 per cent yesterday after its Goodaymart logistics arm agreed to sell a strategic 10 per cent stake to mainland e-commerce giant Alibaba for HK$1.86 billion, in yet another example of mainland appliance manufacturers and e-commerce operators reshaping the competitive landscape before an expected boom in online shopping.
In a three-part deal worth a total of HK$4.13 billion, Alibaba - pushing hard to gear up its logistics network across the nation - also agreed to subscribe to a 2 per cent stake in Haier at HK$18.413 per share, or HK$964.8 million as a whole, and acquire a HK$1.31 billion convertible bond in Haier that could be converted into Haier shares at HK$19.334 each in three years.
Shares in Haier closed up 13 per cent at HK$21.05, with investors upbeat about the prospects of a future boost to sales through online shopping.
"It is a trend for more appliance manufacturers to co-operate with Alibaba or other e-retailers, because they don't want to miss out on the e-commerce boom in China," said Stanley Chan, vice-president and head of Hong Kong and China consumer research at Religare Capital Markets. "The competitive landscape has already shifted from hardware to software and further down to access to [consumer] content."
Haier, the mainland's largest home-appliance manufacturer, was one of the first in the industry to set up a nationwide logistics network extending to third- and fourth-tier cities, an industry veteran said.
"[Goodaymart] could secure more logistics orders from Alibaba, while Alibaba could tap into Haier's last-mile connection," the industry veteran said.
Alibaba said in May it would invest 100 billion yuan (HK$127 billion) to build up its mainland logistics network with the aim of providing 24-hour delivery nationwide in five to eight years.
On Singles Day, November 11, Alibaba and major e-retailers reportedly recorded sales of 80 billion yuan, with Alibaba alone reporting a 70 per cent jump in sales to 35 billion yuan. However, the development of its logistics network has lagged behind the rapid growth of e-commerce, with a backlog of orders taking weeks to clear.
Mainland China is expected to have overtaken the United States as the world's largest e-commerce market this year, with sales estimated at two trillion yuan. Those sales are expected to reach 3.3 trillion yuan by 2015.
